See Where do I enter Form 1098-T? but be sure to give yourself the best refund. See Publication 970 (2020), Tax Benefits for Education | IRS A short example here:Box 1 $15,000Box 5 $20,000Options are: Lower income, bigger tax bill. Make $5,000 taxable income and nobody gets education credit Higher income, lower tax bill. Mark part of box 5 used for room and board and other expenses, Pick any reasonable number, say $8,000. This leaves $3,000 for education credits to be claimed. $8,000 goes into taxable income. Education credit is claimed on $3,000. This is much, much better financially.

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andbon51

Question

where do I put my 1098- T income

Forum|Forum|4 years ago
May 16, 2021
1 reply
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Student Loans

AmyC

Employee

See Where do I enter Form 1098-T? but be sure to give yourself the best refund. See Publication 970 (2020), Tax Benefits for Education | IRS

A short example here:

Box 1 $15,000

Box 5 $20,000

Options are:

Lower income, bigger tax bill. Make $5,000 taxable income and nobody gets education credit
Higher income, lower tax bill. Mark part of box 5 used for room and board and other expenses, Pick any reasonable number, say $8,000. This leaves $3,000 for education credits to be claimed. $8,000 goes into taxable income. Education credit is claimed on $3,000. This is much, much better financially.

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Hal_Al

Employee

@andbon51 said: "where do I put my 1098- T INCOME"

Your 1099-T would only have income if box 5 exceeded box 1 (+any other qualified expenses, e.g. books & computers).

It takes $4000 of qualified expenses to claim the maximum American Opportunity Credit (AOC) and $1000 to get the maximum Lifetime Learning Credit.

Expanding AmyC's example: declare $9000 of scholarship taxable to claim the max AOC and $15,000 taxable to claim the max LLC

In TurboTax (TT), enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Education

--Education Expenses

Enter the 1098-T and follow the interview. When asked how much of the scholarship was used for Room and Board (R&B), enter the amount that you want to be taxable. R&B are non qualified expenses. So, saying you used the scholarship for R&B causes TT to report it as taxable.